Somerset estate agents admit to price-fixing
Four Somerset estate agents have agreed to pay fines totalling over £370,000 to the CMA, after admitting illegal price-fixing.
The businesses - Abbott and Frost Limited, Gary Berryman Estate Agents Ltd (and its parent company Warne Investments Limited), Greenslade Taylor Hunt and West Coast Property Services (UK) Limited – have admitted breaking competition law by taking part in a price-fixing cartel in the Burnham-on-Sea area, which started in February 2014 and lasted a little over a year.
This saw them collude to set minimum commission rates for residential property sales at 1.5%, with a view to denying local home-owners selling their property the chance of securing a better deal.
Stephen Blake, Senior Director, Cartel Enforcement said:
“Moving home is expensive and this shouldn’t be made worse by estate agents conspiring to deny their customers the best possible deal, by agreeing not to compete on fees.
“Price-fixing cheats customers, and we are committed to tackling it regardless of the size of the businesses involved. We have taken action against estate agents before, and will do so again if firms break the law.”
The businesses involved agreed to settle with the Competition and Markets Authority (CMA) after a year-long investigation. Another company, Annagram Estate Agents Limited (trading as ‘C J Hole’), will not be fined - as long as it continues to cooperate – as it was the first company to confess its participation in the cartel. This policy is designed to encourage companies to self-report wrong-doing and so aid the CMA in robustly enforcing the law.
This is the second case brought by the CMA against estate agents in recent years. The previous case saw members of the Three Counties Estate Agent Association fined £735,000 in 2015, and resulted in the CMA launching a campaign designed to improve understanding of the law within that sector, and so compliance with it.
It was this campaign that resulted in the current case being brought to the CMA’s attention, and we encourage others with evidence of competition law being broken to report their concerns to the CMA.
Notes for editors
-
The Competition Act 1998 prohibits agreements, practices and conduct that may have a damaging effect on competition in the UK. The Chapter I prohibition covers anti-competitive agreements and concerted practices between businesses (‘undertakings’) which have as their object or effect the prevention, restriction or distortion of competition within the UK or a part of it and which may affect trade within the UK or a part of it. Any business found to have infringed the Competition Act 1998 can be fined up to 10% of its annual worldwide group turnover.
-
The four estate agents have agreed to pay maximum fines totalling £372,233.
-
Abbott and Frost Limited has agreed to pay a maximum penalty of £30,099. This includes a reduction of 20% for settlement (to reflect the fact that the company has admitted breaking competition law and has agreed to follow a streamlined procedure for the remainder of the case).
-
Gary Berryman Estate Agents Limited and its ultimate parent company Warne Investments Limited have agreed to pay a maximum penalty of £97,807. This includes a reduction of 20% for settlement. The liability of Warne Investments Limited arises from the fact that it held (indirectly) 100% of the shares in Gary Berryman Estate Agents Limited during the relevant period and is therefore presumed to have exercised decisive influence over Gary Berryman Estate Agents Limited during that period and to form part of the same ‘undertaking.’
-
Greenslade Taylor Hunt, a partnership, has agreed to pay a maximum penalty of £186,054. This includes a reduction of 20% for settlement and a reduction of 15% for leniency.
-
West Coast Property Services (UK) Limited has agreed to pay a maximum penalty of £58,273. This includes a reduction of 20% for settlement and a reduction of 35% for leniency.
-
The CMA continues to investigate the conduct of a further estate agent, Saxons PS Limited, which is not a party to today’s settlement. No assumption should be made that Saxons PS Limited has infringed the law.
-
Penalties under the Competition Act become payable only after the CMA has issued a formal infringement decision setting out the CMA’s findings in full, together with the basis for the calculation of the fines. The next procedural step is the issue of a formal statement of objections, which is expected shortly.
-
A party under investigation may enter into settlement if it is prepared to admit that it has breached competition law and is willing to agree to a streamlined administrative procedure for the remainder of the investigation. In return, the CMA imposes a reduced penalty on the business where settlement would achieve clear efficiencies, resulting in the earlier adoption of any infringement decision and other resource savings.
-
Anyone who has information about a cartel is encouraged to call the CMA cartels hotline on 020 3738 6888 or email [email protected].
-
Under the CMA’s leniency policy a business that has been involved in a cartel may be granted immunity from penalties or a significant reduction in penalty in return for reporting cartel activity and assisting the CMA with its investigation. Individuals involved in cartel activity may also be granted immunity from criminal prosecution for the cartel offence under the Enterprise Act 2002. The CMA also operates a rewards policy under which it may pay a financial reward of up to £100,000 in return for information which helps it to identify and take action against illegal cartels. For more information on the CMA’s leniency and informant reward policies, go to leniency and rewards.
-
The CMA has produced a series of animated videos explaining the main principles of competition law and how they affect small businesses.
-
The CMA is the UK’s primary competition and consumer authority. It is an independent non-ministerial government department with responsibility for carrying out investigations into mergers, markets and the regulated industries and enforcing competition and consumer law.
- For more information on the CMA see our homepage or follow us on Twitter @CMAgovuk, Facebook, Flickr and LinkedIn. Sign up to our email alerts to receive updates on Competition Act 1998 and civil cartels cases.
- Information on this investigation can be found on the case page.
- Enquiries should be directed to Rebecca Cassar ([email protected], 020 3738 6633).